In 1940 NYU's School of Education established a Department of Occupational Therapy (OT), making NYU one of a handful of universities to educate occupational therapists. From 1941 to 1942 Susan Colson Wilson, Director of OT at Brooklyn State Hospital, taught the first OT courses.

In 1942 Frieda J. Behlen became the first full-time instructor of the Department of Occupational Therapy. During those first years of the program's existence Behlen was in charge of program development as well as teaching all of the applied OT theory courses. In 1943 the program earned formal approval from the Council on Medical Education of the American Medical Association. NYU's was the only OT school at the time to offer courses for both day and evening students and to accept male students and African-American students.

In 1953 NYU's Department of Occupational Therapy developed a post-professional master's degree program, and in 1973, it established the world's first doctor of philosophy program in occupational therapy. In 1981 the Department developed innovative work-study post-professional master's programs that attracted students from around the world. A key aspect of these programs was the completion of master's research projects related to practice specialization.

The Department began to phase out the bachelor's degree program in 1993, requiring that all professional level preparation be done at the master's degree level. By focusing only on master's and doctoral students, the Department has reaffirmed its primary mission of innovative, quality professional education.